The upper and middle classes are enjoying a night out at the opera, theatre and ballet in new modern facilities, courtesy of the national lottery, at the expense of the working class, a report by MPs finds today.

It attacks Arts Council England for wasting lottery and taxpayers' money to bail out venues such as the Royal Opera House and Sadler's Wells in London, and for not putting enough cash into working-class areas or attracting more diverse groups to theatres.

The report from the Commons public accounts committee criticises the Arts Council for being slow to provide figures which proved that the 15 biggest projects were mainly benefiting the better-off.

It found that in only one city in England - Stoke-on-Trent - do audiences accurately reflect those who buy lottery tickets. In London, 70% of lottery cash distributed to the arts went to high-profile arts projects.

The report says: "In broad terms, the data indicated that the audiences included a greater proportion of people from social groups ABC1 than did the population as a whole, and a lower proportion from social groups C2DE.

"The projects outside London tended to reflect more closely the social make-up of their geographical areas."

The report is highly critical of the Arts Council's handling of the initial lottery grants, saying too much cash went to London because big organisations were far better equipped and faster off the mark to put in applications.

It says the rebuilding of the Sadler's Wells theatre was a case in point. "There had been a number of errors and omissions in the original design," the report says. "To help finance the cost overruns, the theatre received three supplementary grants totalling over £17m, an increase of 58% on its original lottery award."

The report is also critical of the funding given to two projects which closed down - the National Centre for Popular Music in Sheffield and the Dovecote Arts Centre in Stockton-on-Tees, which cost the national lottery £19m. Another £5m was lost when the Harbourside Centre concert hall in Bristol was abandoned.

The MPs say: "With nearly £19m of its lottery money spent on two projects which have closed, and a further £78m tied up in five projects experiencing financial difficulties, Arts Council England does not have a strong track record on project viability."

Edward Leigh, the chairman of the committee, said: "Lottery players will be rightly unimpressed."